The Insurance Regulatory and Development Authority of India (IRDAI) has extended the deadline for feedback on its proposed insurance distribution reforms from 25 October to 31 October 2026, according to a report by Sahi dated 26 October. The regulator received more than 650 stakeholder responses. Spectate Media has not seen the consultation paper, titled "Recalibrating Economics of Insurance Distribution", and relies on the reports below.
What is proposed
The reports list a cap on credit life commission paid to lenders of 2% for single-premium policies and 2.5% for multi-year policies, lower limits on insurers' expenses of management, product-level commission caps, and curbs on loan bundling. Inc42's report of 7 October adds that the proposals would bring back product-wise commission caps and tighter limits on overall insurer expenses, which IRDAI is said to see as a response to commission rising disproportionately.
The pushback
The Insurance Brokers Association of India told Inc42 the proposals could cause a revenue fall of 60% to 70% across broking, and that up to 10 lakh of the 83 lakh jobs in distribution could be lost. It cited IRDAI data showing broker-sourced general insurance premium up 37% and commission payouts up 173% between FY23 and FY27, and said the rise in commission mostly reflects marketing expenses moved onto the books. The association had asked for the deadline to move to the end of December. HDFC Life defended credit life policies, the Sahi report says, and the RBI said it would submit comments on the effect on banks' fee income. Axis Bank's chief executive said on 26 October that banks will assess the final rules before responding.
Key numbers
- Feedback deadline: 31 October 2026 (Extended from 25 October)
- Responses received: More than 650 (As reported by Sahi)
- Credit life cap, single premium: 2% (Proposed)
- Credit life cap, multi-year: 2.5% (Proposed)
What boards and CFOs should note
Three points. First, the window is open until 31 October, so lenders and brokers have days, not weeks, to submit. Second, the commission caps would hit banks that earn fees from selling credit life cover with loans. Third, the 60% to 70% revenue figure is the brokers' own estimate, not IRDAI's.
Source: Sahi, 26 October 2026. This is a summary of a news report, published as general information. It is not legal, tax or investment advice.
This article is journalism and commentary. It is not a recommendation to buy or sell any security, and it is not professional advice. Read the full disclaimer.
